MANAGEMENT

Detailed explanation-1: -Preliminary expenses are treated as intangible asset and shown on the asset side of the balance sheet under the head miscellaneous asset.

Detailed explanation-2: -Preliminary expenses are of the nature of fictitious assets. These are the expenses of the company incurred before the incorporation of the company. Preoperative expenses are those expenses incurred by a company before commencement of commercial operations; or before starting to earn income.

Detailed explanation-3: -Ans: Preliminary expenses are typically classified as capital resources and reported on the property accounting equation in the miscellaneous heading resource.

Detailed explanation-4: -An intangible asset is an asset with no physical form. It’s a long-term asset that accrues value year over year. Examples of intangible assets include intellectual property, brand recognition and reputation, relationships, and goodwill.